The collateral (securities collateralized) that is posted by a borrower against the repo loan in the repo market. Repo collateral may be special collateral security or general collateral security. The former is a specifically determined and specified collateral security in a repo transaction. In this transaction, the underlying security/ issue is well specified. The cash lender requires a specific debt security or an equity issue (the collateral) to be posted by the cash borrower. When a particular security becomes highly in demand by market participants, the security, as collateral, will be deemed a special collateral.

The latter (general collateral security) is a category of collateralized securities (known as eligible collateral) with identical credit quality, and as a result trade in the repo market at the same or a very similar repo rate, or the so-called general collateral repo rate (GC repo rate). By nature, these securities are substitutes: they can be substituted for one another almost at the same the repo rate. This means that the general collateral repo rate is mainly driven by the supply and demand of cash (cost of borrowing cash), rather than that of a specific issue.